Democratic Senatorial Campaign Committee v. FEC (90-1504)

On August 27, 1990, the U.S. District Court for the District of Columbia granted the FEC's motion for summary judgment, ruling that the agency did not act contrary to law when it dismissed a portion of an administrative complaint filed by the Democratic Senatorial Campaign Committee (DSCC).

Background

In its administrative complaint (Matter Under Review (MUR) 2766), DSCC alleged that $325,000 in media expenditures made by the Auto Dealers and Drivers for Free Trade Political Action Committee (Auto Dealers PAC) in support of 1988 Florida Senate candidate Connie Mack were not independent and thus violated the PAC's $5,000 contribution limit for a candidate under 2 U.S.C. §441a(a)(2)(A). DSCC contended that, because the Auto Dealers PAC and the Mack campaign (Friends of Connie Mack) both used the services of two key campaign consultants, the independence of the PAC's expenditures was compromised, resulting in excessive contributions by the PAC. The consultants, two media firms, provided services to the Mack campaign in Florida and to the Auto Dealers PAC for expenditures in other states.

The PAC denied using either media firm in connection with the Florida Senate race, identifying a third firm as its media consultant for Florida. The PAC's director explained in an affidavit that, when the presidents of the two media firms disclosed that they were retained by the Mack campaign, he told them "not to say anything at all" about the Florida race to anyone associated with the PAC. The PAC submitted affidavits by the two presidents consistent with the PAC director's affidavit. The Mack campaign also denied any consultation or coordination with the PAC and provided supporting affidavits.

The FEC's General Counsel recommended that the Commission authorize an investigation of the matter because of "unanswered questions." However, the Commission, by a vote of 3-2 (and one abstention), failed to find "reason to believe" that a violation had occurred with respect to the independent expenditure portion of the complaint, thereby dismissing that portion.[1] (The Commission did find reason to believe that the Mack campaign had failed to comply with the 48-hour notice requirement for last-minute contributions and later entered into a conciliation agreement with the campaign with respect to that violation.)

On June 26, 1990, DSCC filed suit seeking summary judgment that the FEC had acted contrary to law in dismissing DSCC's allegation of coordination between the Auto Dealers PAC and the Mack campaign with respect to the PAC's independent expenditures.

Court decision

The court found that the Commission's decision to dismiss the independent expenditure allegation was not contrary to law, given the "totality of the circumstances" of the case.

DSCC had argued that the "totality of the circumstances" compelled an investigation to determine whether the PAC's expenditures were independent. These circumstances included: (1) the two common consultants used by the Auto Dealers PAC and the Mack campaign; (2) the General Counsel's recommendation to find "reason to believe" and authorize an investigation; and (3) the affidavits submitted by the PAC and the Mack campaign, which DSCC claimed raised substantial questions. The court, however, was not persuaded by DSCC's arguments.

With respect to the common consultants, the court found that "there was no reason to presume 'coordination' as the consultants were retained by the PAC to work on elections only outside the state of Florida."

The court also found that the Commission's decision not to follow the General Counsel's recommendation was not unreasonable. Citing Commissioner Josefiak's Supporting Memorandum for the Statement of Reasons, the court stated: "In refusing to order an investigation, the Commission applied a minimum evidentiary threshold that required at least 'some legally significant facts' to distinguish the circumstances from every other independent expenditure....[O]therwise every 'independent expenditure' complaint would demand investigation." The court said that "the only record of fact offered in support of DSCC's allegations was the use of 'common consultants.'" In the court's view, however, the affidavits suggested that "the Florida Auto Dealers PAC built a 'Chinese Wall' between itself and the two Mack consultants."

With regard to the affidavits, the court found it "entirely reasonable to read [them] as precluding, rather than raising, an inference of coordination."

Accordingly, the court entered summary judgment in favor of the FEC and against DSCC.

FOOTNOTES:

[1] Four affirmative votes are necessary to find "reason to believe."

Source:   FEC Record — October 1990. Democratic Senatorial Campaign Committee v. FEC, 745 F. Supp. 742 (D.D.C. 1990).